Health Insurance – The Impact of Malpractice Lawsuits

There is a major effort to undertake health care reform going on at the moment. Reform is definitely needed because the cost of health insurance has gone through the roof the last two decades. Whether the current plan being offered is a good one or not is up for debate, but what is clear is it does not address one of the factors in rising health care costs – malpractice lawsuits.

There was a time when just about the last thing a doctor had to worry about was being sued for malpractice. Most doctors were tied into their community and new their patients on a very personal basis. When problems or mistakes occurred, an apology was issued and remedy was searched for. Those times are long gone. The health care industry has become, well, something of an industry. The personal relationship between doctor and patient is now a cold one in most cases. When mistakes inevitably occur, the patient tends to look to the courts for a remedy.

Medical malpractice lawsuits are on the rise in a big way and so are the premiums doctors pay for errors and omissions insurance. Still, what does this have to do with the cost of health insurance going up so dramatically? Well, there is a direct causal relationship. Doctors are paranoid about being sued. To limit their risk, they order just about every diagnostic test and treatment that could possibly tell them anything. Why? They don’t want a lawyer asking them why they didn’t do a certain test.

One can hardly blame doctors for taking this approach. Everybody guards against being sued if they can help it. The problem is this approach has a very practical effect of driving the costs of health care absolutely through the roof. Insurance companies will discount these costs to a certain extent, but sooner or later they have to pay a good chunk of them. Guess who the carrier is going to past the costs onto? Yes, the people paying the premiums on the insurance policies. That would be you and me.

I am not suggesting in any way that negligent doctors should be let off the hook when it comes to malpractice claims. The point of this article is simply to suggest that there are many reasons our health care system is out of control from a cost perspective and the possibility of fixing them with one health care reform act is not realistic.